Trendlyne Blog: The Baseline, Latest on stock market and finance in India and the world.

07 Nov 2018

Diwali Top Picks from Edelweiss, HDFC Securities, ICICI Securities and more

Analysts across brokerages have made their diwali picks, with Edelweiss choosing among others, Axis Bank, Aurobindo Pharma, and FirstSource Solutions. Nirmal Bang's Diwali picks include Pi Industries, United Spirits and DCB Bank.

HDFC Securities Institutional has made a variety of picks across sectors - Axis Bank again makes an appearance, and analysts have also picked Dr. Reddy's, LTTS and TCS. IDBI Capital's selections include Aurobindo Pharma, Page Industries and Zee Entertainment. ICICI Direct also picks some familiar names. Besides Aurobindo Pharma and Axis Bank, analysts here have chosen Divis Lab, Titan, and surprisingly, SBI Bank. Edelweiss' non-technical picks include Sun Pharma, Biocon, and Dabur.

The Baseline

01 Nov 2018, 11:44AM

Stock screener: companies with upcoming results seeing positive movement in share price

This stock screener tracking upcoming results checks for Nifty500 companies whose results are being released in the coming days, that are seeing recent positive movement in share price. Among these companies are Axis Bank, Bata India, KEC and more. For the full list, click here.

The Baseline

26 Oct 2018

Is a bottom in sight for Indian stock markets? Multiple factors will reveal themselves by the end of the year

So far, as results have rolled in, companies have largely logged positive results for the September quarter. But there are storm clouds in sight, such as the weakening Yes Bank. the performance of housing finance companies, and the first net profit decline for Maruti Suzuki in 17 quarters. Markets have ended today at seven year lows.

Is there a bottom in sight? Some analysts think that the weakness in markets may extend to the end of the year, as investors wait for oil prices to settle into a clear trend - Russia and Saudi Arabia have been key to setting oil prices this year, and political tensions in Saudi Arabia from the Jamal Khashoggi murder can play out in terms of oil price impact over the next few months.

Returns for foreign investors go down: The other factor is the US Federal Reserve's interest rate hikes, which have led to signficant investor wealth moving to US shores as the returns improve in the US, and as the rupee weakness affects India returns for foreign investors. Foreign investors are no longer overweight in India as they were at the start of 2018. FIIs have already pulled out more than Rs 19000 crore from equity markets so far in October and over Rs 11,000 crore in the last two months. The next rate hike from the Fed is expected in December, which would prolong sell-off. For investors, this is wait and watch mode as of now.

The Baseline created a screener Piot

25 Oct 2018

Piot

Screener tracking stocks with a High Piotroski Score (the well-known piotroski score checks the company's financial strength). To get notified of changes to the screener, set an alert.

The Baseline

16 Oct 2018

India's growth puts it at the top in the world, but risks in debt and job growth

India is the fastest growing large economy today, surpassing the usual bulldozers, including China. The country's challenges, that have been a drag recently for its stock markets, are side effects of this growth, such as its hunger for oil at a time of rising global crude prices (although prices have fallen somewhat in the past week).

The country imports more than 80% of its oil requirements, and as the rupee fell among trade and deficit concerns, it has become abundantly clear that to sustain growth, India will need to grow stronger in managing its trade deficits and its current account debts. India's debt/gdp is over 68%, certainly not the worst in the world and below many advanced and emerging markets. China's debt is 247% of GDP when you combine its private and government debt, a number driven in large amount by private debt, and presenting a challenge for the country as it battles rising trade tariffs from the US, and imposing counter-tariffs that could drive up costs. Nonetheless, a rising oil bill can raise government debt pretty quickly, and raise up inflation for Indian customers, forcing them to borrow more.

But the big, emerging challenge for India is in job growth, as it faces a challenge most large economies are already past - an extremely young population impatient for opportunity, and this has been linked by economists to rising religious and political tensions in the most populated states such as Uttar Pradesh. Unless successive governments decisively kickstart this in these states, particularly across the north, where joblessness has been an endemic problem, India will continue to face an extremely restless populace making contradictory demands on its governments, from reservations, to religious favoritism, to disproportionate giveaways. Farmer distress and recent tensions around job quotas have already been warning signs for a fast growing economy, that GDP growth rates are not enough.

Image: Tradingeconomics

The Baseline

11 Oct 2018

Stock Screener: Nifty500 Companies with improving valuation scores after recent falls in share price

October has been a tough time for the stock market, and recent share price declines across sectors and industries have made many stocks with once unaffordable valuations, easier to get. This stock screener looks at Nifty500 companies whose valuations have improved with stock market falls (this is a subscriber screener, but snapshot is above). One note: Investors should remain cautious about global factors including rising interest rates in the US, and oil prices.

Both of these may impact Indian stock markets in the coming week, and the response from the government and the RBI on currency stabilization and the trade deficit will also be critical. Take any very confident analyst saying that "the stock market will recover by X date" with a pinch of salt.

The Baseline

05 Oct 2018

Volume Shockers stock screener: As markets fall, stocks see shakeup on high volumes

Its no surprise that the volume shockers stock screener has multiple oil retailers at the top of the list, with the government mandating that companies will have to bear some of the price cut announced for petrol and diesel. Auto parts firm Sundram Fasteners and Silicon Fibres company Grindwell Norton. Grindwell Norton has been falling on high volumes since the release of a report yesterday by DataBridge Capital on the Silicon Carbide Fibres market.

The rupee has breached 74/dollar for the first time, while the RBI has said it is keeping the repo rate unchanged at 6.5 percent.

The Baseline

01 Oct 2018, 03:36PM

Volume Shockers as Markets rise: IL&FS, Balkrishna Industries gain

Markets are in the green today after the government stepped in to contain the flailing of IL&FS. The Noida-based IL&FS Transportation rose as much as 20 percent to Rs 27 after the government sought to takeover the parent company IL&FS by replacing all existing board members. Other big gainers in the High Volume High Gain stock screener today included Lakshmi Vilas Bank, Balkrishna Industries and others.

The Baseline

28 Sep 2018

Expert Screener Series: Jim Slater's method of identifying growth stocks

One of the more famous investing experts is Jim Slater, who coined the term "Zulu Principle" for his investing strategy identifying cheap growth stocks. The strategy looks at primarily midcap and smallcap picks that have the potential to be picked up at cheap prices for significant growth. Thestock screener built around this strategy looks at factors such as PEG, PE, Earnings Per Share, as well as the Relative Strength Index.

Based on these principles, the screener picks out Crest Ventures, Cantabil Retail and others.

The Baseline

26 Sep 2018

The FIIs are holding on to their money, believe bear markets will continue

Most foreign investors and funds are expecting Indian and Asian bear markets to continue for a while, considering the various factors walloping these economies together - the US-China trade war, rising oil prices, and the weakening Chinese currency.

The deepening US-China trade skirmish

US President Trump has continued to make aggressive remarks against China, including statements that the country is "stealing US technology".

The demands that the United States has made of the Chinese government, the Chinese say, are unteneble, including demands that they pause on high-tech investments in defence and software. Consequently China is refusing to return to the negotiating table until the US pauses on the tariffs. Trump has continued to impose tariffs on Chinese imports despite the relative unpopularity of this trade war in the US - China's counter-tariffs have already hit the US farm belt, and duties on Chinese imports have impacted costs for American consumers in a range of industries.

The fear that the trade war will continue is a major factor in analyst calculations that Asian markets, including India, have yet to see their bottom. If the Chinese currency continues to decline on account of these tariffs and trade pushback, other Asian currencies are likely to as well, including the rupee, as everyone tries to stay competitive.

The oil price whammy

Another big concern is the impact of rising oil prices. Here too, the Trump effect can be seen, with the renewed US sanctions against Iran pulling the country's oil supplies out of the global market. India has been a key buyer of Iran oil, and reductions in supplies to comply with US sanctions are hitting domestic prices - the reduced global supply is raising the price of crude everywhere.

Continuing concerns around NPAs and debt of banks and NBFCs have also limited chances of any limited recovery. Rising prices are impacting consumers, and although inflation has so far remained under control, but that can change if pump prices continue to rise, and as industries across the board start being affected by rising energy costs.

Photo by Mark Basarab